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TMI Blog2019 (2) TMI 1762X X X X Extracts X X X X X X X X Extracts X X X X ..... AZB Partners. For the Respondent : Advocate Manaswi Agrawal a/w Advocate Mithila Damle i/b Verus Advocates. ORDER M.K. Shrawat, 1. The Petitioner/Applicant viz. Anchor Leasing Private Limited (hereinafter as Financial Creditor) has furnished Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter as Rules) in the capacity of Financial Creditor on 15.01.2018 by invoking the provisions of Section 7 of the Insolvency and Bankruptcy Code (hereinafter as Code) against Euro Ceramics Limited (hereinafter as Corporate Debtor ). The registered address of the Corporate Debtor is stated to be 208, Sangam Arcade, Vallabhbhai Road, Opp. Railway Station, Vile Parle (West), Mumbai-400056. 2. In the requisite Form, under the head Particulars of Financial Debt the total amount of debt granted is ₹5,00,00,000/- and the total amount claimed to be in default is stated to be ₹10,81,50,936/- (inclusive of principal amount and interest @ 12% quarterly rests) as on 31.12.2017. The date of default as per Form I is mentioned to be 01.07.2011. A) Brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377;5,00,00,000/- in the reply letter dated 13.08.2013 to the notice issued by the Financial creditor for initiation of proceedings under S.138 of Negotiable Instruments Act, 1881. However, the Corporate Debtor raised a defence that because the Financial Creditor failed to exercise the right to sell/dispose the pledged 12,44,000 shares for the recovery of its dues, it cannot recover the money from the Corporate Debtor. The Corporate Debtor further goes on to say that the cheque was given only as a security and its encashment was wrongful. 9. It is further submitted that a legal notice dated 25.05.2017 was issued by the Financial Creditor calling upon the Corporate Debtor to repay the loan amount along with interest. However, the Corporate Debtor did not reply to the above said notice, neither paid the loan amount. 10. The Petitioner further argues that the petition is complete in all respects, the Corporate Debtor is not making the payment and all the procedural formalities have been complied with, this Petition/Application may be Admitted for the initiation of the CIRP. C) Submissions by the Corporate Debtor : 11. The Corporate Debtor h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to prove the existence of an agreement as regards the payment of interest on the amount advanced. D) Rejoinder by the Financial Creditor: 14. In response to the Corporate Debtor s contention that the cheque of ₹5,00,00,000/- was given as a security to the debt, the Financial Creditor relies on Puneet Kumar Agarwal v. M/s Imaginations Agri exports Ors. [2013 SCC Online Del 701], order Dated 19.02.2013, which says that even if the cheque was to be treated as a security, the person issuing the blank cheque is authorizing the holder of the cheque to fill up the amount thereon and realize the money due to him. Therefore, this argument of the Corporate Debtor is unsustainable. 15. The Financial Creditor further argues that it is the option of the Financial Creditor to enforce or not enforce the security given against a loan. The Corporate Debtor cannot compel the Financial Creditor to sell the pledged security. The Financial Creditor has placed reliance on a number of judgements to substantiate this contention. In National Securities Clearing Corporation Ltd. V. Prime Broking Company (India) Ltd. [2016 SCC Online Bom 4501],Order dated 28.06.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The Code nowhere prescribes the compulsory existence of an express agreement to prove the loan and its disbursement, but defined in section 5(8) the conditions under which a transaction be treated as a Financial Debt . Therefore, this contention of the Corporate Debtor is hereby rejected. 18. As far as the issue of non-filing of account statements as per section 2 of the Bankers book Evidence Act, 1891 is concerned, I am placing reliance on Standard Chartered Bank DBS Bank Ltd. V. Ruchi Soya Industries Ltd. (CP No. 1371 1372/IBP/NCLT/MAH/2017) wherein inter alia it was held and I am also of the similar view that quote, since the Corporate Debtor s case is that these entries in Bankers Book are not in accordance with the Bankers' Book Evidence Act, it is essential to look into Part V of Form I in respect to Entry 7 of this Part V. In Entry 7, two things are requisite, one is, it must be a copy of entry in a Bankers Book, two, that copy shall be attached with Form No. 1. If we see the definition of Bankers' Books , statement of account being a record used in the ordinary business of the Bank, it will fall within the definition of Bankers' Book. In En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 9. As long as there is a Debt and a Default has occurred, I am consciously inclined to admit the petition after the landmark judgement of the Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. Ors. V. Union of India Ors. [Writ Petition (Civil) No. 99 of 2018]. The defences raised by the Corporate Debtor, in my view, hold no water. All the more, the acknowledgements of the Corporate Debtor to the debt, be it statement of accounts, the statement of confirmation of accounts duly signed by the Corporate Debtor, or the reply to this petition, the Corporate debtor has time and again acknowledged the outstanding dues payable to the Financial creditor. It is a well known principle of law that, quote Admissions are the best proof of the facts admitted. Admissions in pleadings or judicial admissions, made by the parties during the hearing of the case are fully binding on the party that makes them and constitute a waiver of proof unquote. Hence, in the present case, by admitting the liability in affidavit in reply to this petition, the Corporate Debtor is estopped to prove the non-existence of debt by raising any kind of dispute or defence as the same is all clich for deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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